On March 23, the Parliament adopted the draft laws “On the Ratification of the Framework Agreement between the Governments of Ukraine and Hungary on Providing a Loan on the Terms of Dedicated Assistance” and “On Amendments to the State Budget of Ukraine for 2017”. These draft laws were prepared by the Ministry of Finance to implement the governmental agreement signed by Prime Minister Volodymyr Groysman in Budapest last year.
What’s it about?
The Cabinet of Ministers approved draft laws making it possible to receive a loan from Hungary amounting 50 million Euro. According to the proposed changes to the state budget for 2017, the state company “Ukravtodor” shall ensure the preparation and implementation of corresponding contracts. The loan shall be served and re-paid from the state budget of Ukraine.
During the voting, members of Parliament added a point requiring the creation of a commission by the Ministry of Finance which shall prepare proposals on the allocation of the loan. At least 50% of the members of the commission shall be representatives of the Budget Committee of the Parliament. It should be noted that this point does not refer to the international assistance which Ukraine is receiving to develop its road infrastructure.
What’s the advantage?
The adopted draft laws make it possible to receive funding at preferential terms amounting up to 50 million Euro to implement investment projects for the development of the road infrastructure at the Ukrainian-Hungarian border including the motorways M25 (Petrovo – checkpoint “V.Palad”), M24 (Mukachevo-Beregovo) and М23 (Beregovo-Vynogradiv-V.Kopanya).
on November 24, 2016, the Governments of Ukraine and Hungary signed the Framework Agreement stipulating the loan to be provided on the terms of dedicated assistance.
The key loan terms are:
- total amount – up to 50 million Euro;
- maturity period – 18.5 years;
- delay of re-payment on the loan and interest rate – 1.5 year;
- interest rate – 0%.